Russia Grants Loan To Armenia To Buy Arms, Modernize Army

Russia has granted ally Armenia a $200 million loan to buy weapons and help modernize its armed forces.

Armenian Deputy Defense Minister Ara Nazaryan told a parliament session on July 2 that the country's armed forces would "get new modern arms, which will have a substantial impact on balancing forces in the region.”

Lawmakers later ratified the credit agreement with Russia signed in Yerevan last week.

The loan with a maturity of 13 years has a three-year grace period and an annual 3 percent interest rate.

The money is to be spent to purchase Russian weapons at a discount in 2015-2017.

Armenia, which hosts a Russian military base, is Russia's chief ally in the South Caucasus.

It has been concerned about Moscow's arm sells to neighboring Azerbaijan.

Yerevan has been in conflict with Baku over Nagorno-Karabakh, a breakaway ethnic Armenian enclave in Azerbaijan.